The primary issue we must decide in this appeal, filed by the Comptroller of the Treasury, is whether the Tax Court erred in requiring the Comptroller to pay interest on a tax refund to Science Applications International Corporation (SAIC). The Comptroller also raises a jurisdictional challenge to the Tax Court’s review of the Comptroller’s disallowance of SAIC’s refund claim for interest. We shall hold that the Tax Court has jurisdiction to hear a claim for interest on a refund, and, on the merits, because the Tax Court committed no errors of law and its conclusions were supported by substantial evidence, we shall affirm.
I.
On or about October 15, 2000, Appellee, SAIC filed its Maryland corporation income tax return for the fiscal year beginning February 1, 1999 and ending January 31, 2000. SAIC reported that it owed $4,216,431. Because SAIC had previously remitted estimated tax payments of $4,901,759, the return reflected a refund of $685,328, which the State paid in a timely manner. Three years later, on October 14, 2003, SAIC amended its 1999 return. The amendment claimed a further refund of $4,274,519 based on the argument that a gain from the sale of shares of stock of Network Solutions, Inc. (NSI), which SAIC had held for investment purposes, lacked a sufficient nexus to Maryland for the gain to be taxable under the United States Constitution and Maryland law.
See Hercules v. Comptroller,
The Comptroller denied SAIC’s claim for refund by letter dated December 18, 2003, based on the Comptroller’s determination that a portion of the NSI gain was taxable in Maryland. Following an informal hearing, pursuant to § 13-510 of the Tax-General Article, Maryland Code (1988, 2004 Repl. Vol.),
1
the Comptroller issued a Notice of Final Determination
SAIC filed a petition of appeal in the Maryland Tax Court, contesting the Comptroller’s denial of its claim for a refund. After an evidentiary hearing, the Tax Court reversed the decision of the Comptroller’s denial of SAIC’s claim for a refund, based on the Tax Court’s finding that there was no nexus between SAIC’s capital gain of the stock sale and the State of Maryland. The Comptroller did not seek judicial review of the Tax Court’s refund decision and paid to SAIC the full amount of the refund.
SAIC filed a motion in the Tax Court to compel the Comptroller to pay interest on the refund. The Tax Court ruled in favor of SAIC, holding that interest was due on the refund from the time that SAIC filed the claim for refund and the time that the Comptroller’s office paid the refund, and that no interest on the interest was due.
The Comptroller filed a petition for judicial review in the Circuit Court for Baltimore City. 2 The Circuit Court affirmed the Tax Court.
The Comptroller noted a timely appeal to the Court of Special Appeals. This Court granted certiorari on its own initiative prior to any decision of the intermediate appellate court to consider whether the Tax Court erred in exercising jurisdiction to hear and decide SAIC’s motion to compel payment of interest, whether SAIC’s motion was barred by
res judicata,
and whether the Tax Court erred in requiring the Comptroller to pay interest on the refund due to SAIC.
Comptroller v. Science Applications,
II.
Before this Court, the Comptroller argues that SAIC’s claim for interest was barred by res judicata because SAIC failed to raise the issue of interest on the refund in its original petition in the Maryland Tax Court. He maintains that the Tax Court does not have jurisdiction to compel payment of interest on a refund because § 3-103(a) and § 13-510(a) do not mention interest on the refund. Finally, the Comptroller argues that SAIC’s refund claim fits into an exception to § 13-603’s general provision for interest on the refund, which reads, in pertinent part, as follows:
“(b) Exceptions.—A tax collector may not pay interest on a refund if the claim for refund is:
(2) based on:
(i) an error or mistake of the claimant not attributable to the State or a unit of the State government ...”
It is the Comptroller’s position that § 13-603 precludes granting interest on a refund that was made due to an error by the taxpayer. The Comptroller contends that SAIC made a mistake on its original tax return filing that could not be “attributable to the State” because the Comptroller did not compel SAIC by assessment or any active involvement with the original filing. He objects primarily to the Tax Court’s application of
DeBois Textiles v. Comptroller,
Appellee, SAIC, counters that the doctrine of res judicata is inapplicable in this case because there is no second action— the motion to compel interest on the refund arises out of the enforcement of the Tax Court’s order reversing the Comptroller’s denial of a refund. SAIC further contends that the Tax Court had jurisdiction to compel interest on the refund because there is a direct relationship between refunds and interest on those refunds, and the Tax Court is explicitly granted jurisdiction over the denial of a refund. Appellee contends that interest on the refund was mandated by § 13-603 because any error made by SAIC was attributable to the State.
III.
When reviewing the decision of an administrative agency, such as the Tax Court,
3
we review the agency’s decision directly, not the decision of the circuit court.
Anderson v. General Casualty,
IV.
We consider first the Comptroller’s jurisdictional argument. The Comptroller argues that the Tax Court lacked jurisdiction to hear SAIC’s claim for a refund of interest because the agency’s statutory jurisdiction does not extend to interest claims.
The Maryland Tax Court is established by § 3-102 which states as follows:
“There is a Maryland Tax Court, which is an independent administrative unit of the State government.”
The Tax Court’s subject matter jurisdiction is governed by § 3-103(a), which states as follows:
“(a) In general.—The Tax Court has jurisdiction to hear appeals from the final decision, final determination, or final order of a property tax assessment appeal board or any other unit of the Stategovernment or of a political subdivision of the State that is authorized to make the final decision or determination or issue the final order about any tax issue, including:
(1) the valuation, assessment, or classification of property;
(2) the imposition of a tax;
(3) the determination of a claim for refund;
(4) the application for an abatement, reduction, or revision of any assessment or tax; or
(5) the application for an exemption from any assessment or tax.”
Section 13-510(a) delineates specific decisions that are appeal-able to the Tax Court, and provides, in pertinent part, as follows:
“(a) In general—Except as provided in subsection (b) of this section and subject to § 13-514 of this subtitle, within 30 days after the date on which a notice is mailed, a person or governmental unit that is aggrieved by the action in the notice may appeal to the Tax Court from:
(1) a final assessment of tax, interest, or penalty under this article;
(2) a final determination on an application for revision or claim for refund under § 13-508 of this subtitle;
(3) an inheritance tax determination by a register or by an orphans’ court other than a circuit court sitting as an orphans’ court;
(4) a denial of an alternative payment schedule for inheritance tax or Maryland estate tax;
(5) a final determination on a claim for return of seized property under § 13-839 or § 13-840 of this title; or
(6) a disallowance of a claim for refund under § 13-904 of this title.”
The Tax Court ruled that the Comptroller was required to pay interest on the refund, based upon § 13-603(a), “Interest on refunds.” The Tax Court reasoned as follows:
“A consideration of both statutes [Section 3-103 and Section 13-603] when read together make it clear that there is a direct relationship between tax refunds and interest on refunds. In the result of that relationship, it is clear that the issues regarding refunds and interest on refunds are certainly within the jurisdiction of this Court.”
Section 13-603 reads, in pertinent part, as follows:
“(a) In general.—Except as otherwise provided in this section, if a claim for refund under § 13—901(a)(1) or (2) or (d)(l)(i) or (2) of this title is approved, the tax collector shall pay interest on the refund from the 45th day after the claim is filed in the manner required in Subtitle 9 of this title to the date on which the refund is paid.
“(b) Exceptions.—A tax collector may not pay interest on a refund if the claim for refund is:
(1) made under any provision other than § 13-901(a)(l) or
(2) or (d)(1)© or (2) of this title;
(2) based on:
© an error or mistake of the claimant not attributable to the State or a unit of the State government;
(ii) withholding excess income tax;
(iii) an overpayment of estimated financial institution franchise tax or estimated income tax; or
(iv) an overpayment of Maryland estate tax based on an inheritance tax payment made after payment of Maryland estate tax;.... ”
As the Tax Court noted, there is a direct relationship between the determination of whether a refund was denied properly and
We turn to the Comptroller’s argument that SAIC is barred by the doctrine of res judicata from raising its claim for interest on the refund. The doctrine of res judicata has been described as follows:
“The doctrine of claim preclusion, or res judicata, ‘bars the relitigation of a claim if there is a final judgment in a previous litigation where the parties, the subject matter and causes of action are identical or substantially identical as to issues actually litigated and as to those which could have or should have been raised in the previous litigation.’ The doctrine embodies three elements: (1) the parties in the present litigation are the same or in privity with the parties to the earlier litigation; (2) the claim presented in the current action is identical to that determined or that which could have been raised and determined in the prior litigation; and (3) there was a final judgment on the merits in the prior litigation.”
R&D 2001 v. Rice,
The Comptroller’s argument that res judicata bars SAIC’s claim is based upon his view that SAIC’s motion to compel payment of interest is an impermissible second action because SAIC did not seek interest explicitly in its initial petition to the Tax Court when it first sought the refund, and, therefore, it is barred from seeking the interest. Both the Tax Court and the Circuit Court rejected the Comptroller’s argument, as does this Court.
Res judicata
“bars the relitigation of a claim if there is a final judgment in a previous litigation where the parties, the subject matter and causes of action are identical or substantially identical as to issues actually litigated and as to those which could have or should have been raised in the previous litigation.”
Board of Ed. v. Norville,
“It is true that the case at bar has been litigated to its conclusion. The motion by Petitioner, however, to compel interest on a refund ... arises from and is directly related to the enforcement of the May 11, 2006 Order whereby this Court reversed the Comptroller’s denial of the corporation’s claim for refund of corporate income taxes.”
The Circuit Court ruled also that SAIC’s claim was not barred by res judicata. The Circuit Court reasoned that the claim for interest could not have been litigated with the original claim for refund because it grew out of an attempt to enforce the May 11, 2006 order, the order requiring the refund, and that the interest claim is directly related to the claim for the refund and not a separate claim.
We hold that SAIC’s Motion to Compel Payment of Interest on the refund was not barred by the principle of
res
judicata.
The claim was not a second claim or a second proceeding as contemplated by
res judicata
principles. Interest, under § 13-603, must be paid, as a matter of law, on the refund, unless a statutory exception applies. Therefore, if a refund is granted, interest “shall” be paid to the successful claimant when the claim does not fall within an exception, even if that claimant did not request the interest in the original claim for a refund. SAIC could not have known that it needed to litigate the possibility of denial of interest
V.
We turn to the merits of this appeal and consider whether the Tax Court erred in ordering the Comptroller to pay interest on the refund under the provisions of § 13-603(b). If the claim for a refund is based on “an error or mistake of the claimant not attributable to the State or a unit of the State government,” the Comptroller is prohibited by statute from paying interest on the refund. § 13—603(b). The Tax Court ruled that interest was due on the refund, stating as follows:
“[SAIC] used reasonable judgment under the circumstances, was led by the laws, regulations, or policies expressed by the State to the mistaken conclusion that tax was owed. Thus, [SAIC’s] mistake was attributable to the State, and Section 13-603(a) mandates that interest be paid on the refund.”
The Comptroller contends that the Tax Court erred in its interpretation of § 13-603 because the phrase “attributable to the State” only encompasses “an assessment of tax or other affirmative action.” The Comptroller argues also that the Tax Court’s conclusion that SAIC’s mistake was attributable to the State was not supported by the evidence.
Section 13-603 controls interest on tax refunds in Maryland. Tax refunds in Maryland are “matters of grace
with the Legislature.”
MPTH Associates v. Dep’t of Finance,
With these principles in mind, we turn to an examination of § 13-603’s plain language. Section 13-603 provides that “the tax collector shall pay interest on the refund from the 45th day after the claim is
Considering the plain meaning of § 13-603’s predecessor statute,
4
we have said “the General Assembly intended that interest be paid on refunds unless the overpayment was due solely to taxpayer mistake or error.”
Comptroller v. Fairchild Industries,
In
Davidson,
the executors of an estate filed an initial tax return with both the Federal government and the State of Maryland.
Comptroller v. Davidson,
“It is perfectly clear, we think, that there was no mistake or error on the part of the executors. Payment of the Maryland estate tax was expressly required when the Federal estate tax was paid. Hence the exception cannot apply, and interest on the refund is required upon any theory of the case.”
Davidson,
Fairchild and Davidson establish that in some cases, refunds are due by operation of law, and in such cases, a claimant makes no mistake or error in filing for a refund claim. Where there is no error or mistake on the part of the claimant, and no other exception applies, interest on the refund amount is due under § 13-608. This conclusion, however, does not dispose of the case sub judice because both parties agree that the payment was “erroneous” under § 13-901(a)(1). 6 Whether SAIC’s request for interest on the refund is successful therefore hinges on the interpretation of the second prong of § 13-603(b)(2)—what makes an error or mistake “attributable to the State”?
To answer this question, the Tax Court applied a standard it first articulated in
DeBois Textiles Int’l v. Comptroller,
Income Tax No. 1630,
“In the instant case, Petitioner’s error consisted of its belief that DISCs filing Maryland income tax returns must report and pay tax on 100% of their income. This false impression was a reasonable interpretation of the State law and policy because the issue of whether or not DISCs could apportion part of their income outside the State had not been decided by the courts at the time Petitioner filed its returns and paid the tax. During that time the Comptroller insisted that DISCs report 100% of their income on their Maryland returns and any DISC which failed to comply wasappropriately assessed. It was not until 1983 that this Court rendered a decision which held that DISCs are entitled to apportion part of their income outside the State. Thus Petitioner’s mistake was attributable to the State and Section 310(c) mandates that interest be paid on the resultant refund.”
Id. (internal citations omitted).
The Tax Court applied the standard articulated in DeBois to SAIC’s original tax return, finding that SAIC “used reasonable judgment under the circumstances, was led by the laws, regulations, or policies expressed by the State to the mistaken conclusion that tax was owed,” and thus its error was attributable to the State. The Tax Court’s application of the DeBois standard comports with the plain meaning of “attributable” as used in § 13-603(b).
One guide to the plain meaning of “attributable” is the dictionary definition. A dictionary definition is not dispositive of the meaning of a statutory term, but it may “provide a useful starting point for discerning what the legislature could have meant in using a particular term.”
Ishola,
The commonsense understanding of the phrase “attributable to the State” as used in § 13-603(b) means that the mistake or error can be said to be caused by the State. The Tax Court’s
DeBois
standard is an articulation of the factual circumstances that signify that an error or mistake could be “set down or th[ought] of as belonging to, produced by, or resulting from; assign[ed] or ascrib[ed] to” the State. The interpretation of “attributable” used by the Tax Court is in keeping with an “ordinary, popular understanding of the English language.”
Bowen,
The Comptroller urges this Court to find the Tax Court erred as a matter of law in applying the DeBois standard, arguing that DeBois goes beyond the language of the statute. The Comptroller proposes that an error or mistake cannot be “attributable” to the State unless it was caused by an assessment or other direct action taken by the State during the claimant’s original tax filing process. The Comptroller’s proposed interpretation, when considered in the context of our reasoning in Fairchild and Davidson, does not give full effect to each word and phrase of § 13-603(b).
In
Fairchild
and
Davidson,
this Court considered two scenarios where the taxpayer was due a refund although the taxpayer did not err in filing the original return. In
Fair-child,
the refund was due based upon a statute.
Fairchild,
The Tax Court’s interpretation of “attributable to the State” comports with the plain meaning of that phrase. The Tax Court did not err as a matter of law in using the DeBois standard to evaluate whether SAIC’s original mistake on its return could be deemed “attributable to the State.”
We next turn to address the Comptroller’s contention that the Tax Court improperly applied the DeBois standard to SAIC’s interest refund claim. The Tax Court applied the DeBois standard to the facts of SAIC’s case and made factual findings to support its legal conclusion that the original return was incorrect because it contained “an error or mistake of the claimant not attributable to the State” and, therefore, interest on the refund was due. The Tax Court was engaged in deciding a mixed question of fact and law. In considering this Court’s role in reviewing a decision of the Tax Court involving mixed questions of fact and law, we have stated as follows:
“Finally, we note that the interpretation of the tax law can be a mixed question of fact and law, the resolution of which requires agency expertise. NCR Corp. v. Comptroller,313 Md. 118 , 133-134,544 A.2d 764 , 771 (1988) (stating that ‘determinations involving mixed questions of fact and law must be affirmed if, after deferring to the Tax Court’s expertise and to the presumption that the decision is correct, a reasoning mind could have reached the Tax Court’s conclusion.’Xinternal quotation marks omitted). See also Vann,382 Md. at 298 ,855 A.2d at 320 (stating that ‘[djeferential review over mixed questions of law and fact is appropriate in order for the agency to fulfill its mandate and exercise its expertise’); CBS [v. Comptroller],319 Md. at 698 ,575 A.2d at 329 (noting that, ‘we apply [a] deferential standard of review not only to its fact-finding and its drawing of inferences, but also to its ‘application of the law to the facts’); Ramsay, Scarlett & Co.,302 Md. at 838 ,490 A.2d at 1303 (holding that ‘whether a business is unitary or separate ... for tax purposes ... is not solely a question of law’ and therefore, the Tax Court’s decision on the question deserves deference. Rather, we must ask ‘whether in light of substantial evidence appearing in the record, a reasoning mind could reasonably have reached the conclusion reached by the Tax Court, consistent with a proper application [of the tax statute in question].’).”
Citicorp,
“We have reviewed the return referenced above and the request for an adjustment and/or refund must be denied. “The State of Maryland does not allow a subtraction for the exclusion of capital gain from the sale of NSI shares so we are unable to allow the requested adjustment.
“If you wish to dispute this decision, you must request an informal hearing within thirty (30) days of the date of this letter. ...”
The Tax Court inferred from the Comptroller’s letter and subsequent denial of SAIC’s appeal that the State’s laws and polices at the time SAIC filed the original return required that SAIC pay tax on the sale of NSI shares. We give deference
to inferences drawn by the Tax Court.
Citicorp,
JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE CITY AFFIRMED. COSTS TO BE PAID BY APPELLANT.
Notes
. Unless otherwise noted, hereinafter all statutory references will be to the Tax-General Article, Maryland Code (1988, 2004 Repl. Vol.).
. Science Applications International Corporation (SAIC) filed a cross-appeal in the Circuit Court. SAIC had argued before the Tax Court that they were due interest on the interest, analogizing to an IRS administrative case that had awarded interest on the interest in a deficiency proceeding. The Tax Court rejected the claim and awarded interest only for the time period between the refund claim and when the Comptroller issued the refund. The Circuit Court similarly rejected SAIC’s analogy, holding that there was no statutoiy provision for interest on the interest. SAIC does not appeal that decision.
. The Tax Court, despite its name, is an administrative body.
See
§ 3-102,
Harford County v. Saks,
. The relevant statute in
Comptroller v. Fairchild Industries,
"[Ijnterest may not be paid on tax refunds now pending or subsequently filed pursuant to this section if the tax originally paid was paid in whole or in part by reason of a mistake or error on the part of the taxpayer and not attributable to the State or any department or agency thereof....”
The current language, "[a] tax collector may not pay interest on a refund if the claim for refund is ... based on ... an error or mistake of the claimant not attributable to the State or a unit of the State government,” was enacted by ch. 2, Md. Laws 1988. That Act created the Tax-General Article and was a comprehensive re-enactment of the general tax code. The Revisor’s Note provides that § 13-603 (b) was "new language derived without substantive change” from Art. 81, § 310(c), Md. Code (1957, 1980 Repl. Vol.). A comparison of the plain language of the two statutes confirms that there was no substantive change that could affect the interpretation of the portion of the statute at issue here. Both statutes require the presence of a mistake and that that mistake is not attributable to the State—while the revised language omits the "and,” a conjunction of the two elements is still present because "not attributable to the State ...” modifies the phrase "an error or mistake of the claimant.”
. The Davidson Court preceded the discussion of § 218, Md. Code (1957, 1963 Cum. Supp.) with the following caveat:
“But if we assume, without deciding, that resort to sec. 218, might have been permissible, or even required, we think the Comptroller could not prevail.”
Davidson,
. Section 13-901(a) reads, in pertinent part, as follows:
"a) In general.—A claim for refund may be filed with the tax collector who collects the tax, fee, or charge by a claimant who: “(1) erroneously pays to the State a greater amount of tax, fee, charge, interest, or penalty than is properly and legally payable.”
. A provision for payment of interest on a refund was first included in the tax statute by 1939 Md. Laws, ch. 277, § 241, codified as Art. 81, § 248 of the Md. Code (1939). Section 248 provided that “[i]n the event the overpayment results from an error not due to the fault of the taxpayer a refund shall be paid with interest at 6% per annum.” Id. That provision was repealed by 1945 Md. Laws, ch. 269. In 1952, a new provision for payment of interest on refunds was enacted by 1952 Md. Laws, ch. 28, codified at Art. 81, § 306, Md. Code (1951). Section 306 provided that interest would not be paid "where the tax originally paid was paid in whole or in part by reason of a mistake or error on the part of the taxpayer and not attributable to the State or any department or agency thereof.” Id.
. The Comptroller argued that this Court’s decision in
Hercules v. Comptroller,